PROVIDENCE – Santander Bank reported a 6 percent increase in profit in the second quarter on Wednesday.
The Boston-based United States retail and commercial banking business of Spain-based Banco Santander Group, the bank reported net income in the U.S. rose to $157 million in the quarter ended June 30, up from $148 million a year earlier.
Small Office, Big Impact: Rhode Island Health Care Association Upgrades to Energy-Efficient Lighting
For many small businesses and nonprofit organizations, relatively simple upgrades can deliver meaningful savings while…
Learn More
The bank had 32 branches in Rhode Island as of last year, and was the fourth-largest bank in the state with deposits here totaling $2.33 billion, federal statistics show.
The bank reported net interest income of $541 million for the quarter, an increase of 4.8 percent year over year from $516 million one year prior.
Net fee income was $96 million in the second quarter, a decline from $102 million in the second quarter of 2017.
Customer loans totaled $52.3 billion, compared with $51.8 billion one year prior, a 1 percent increase. Net loan-loss provisions for the quarter totaled $26 million, down from $35 million in the second quarter 2017.
Total assets for the quarter were $73.1 billion, a 5.7 percent decline from $77.5 billion in the second quarter of 2017.
Customer deposits declined 0.9 percent year over year to $53.4 billion, from $53.8 billion in the second quarter of 2017.
Total liabilities for the U.S. bank totaled $62.8 billion, a 6.3 percent decline from $67 billion in the second quarter of 2017.
Domestically, both Santander Bank and Santander Consumer USA, which handles auto loans, delivered increased profitability as the bank strengthened its net interest margin while also improving efficiency, the bank said.
Santander Consumer USA saw a reduction in costs and lower loan-loss provisions, the bank said.
Santander Holdings USA, which serves as a holding company for the bank’s U.S. operations, passed the Federal Reserve’s stress test in June, with regulators not objecting to an increase in dividend payments.
Companywide, Banco Santander Group took a hit to its quarterly profit from ongoing costs of its takeover last year of Banco Popular, the bank reported.
The parent company of Santander Bank reported a total profit of $1.98 billion in the second quarter ended June 30, down 3 percent from the same period last year.
The decrease was due to a $350 million charge, primarily related to planned integration costs from the takeover. Excluding the charge and currency movements, the bank reported an underlying profit of $2.33 billion in the quarter, up 14 percent from a year earlier.
Worldwide, Santander’s total assets slipped to $1.67 trillion in the second quarter, down 0.8 percent from a year earlier. Loans and advances grew by a modest 0.3 percent to $1 trillion, while deposits grew by 1.3 percent to $904.6 billion.
The bank reported gross income of $14.03 billion in the quarter, unchanged from a year earlier. Total expenses grew by 1 percent to $6.68 billion, while net operating income dropped by 2 percent to $7.35 billion.
“Our balanced presence across both Europe and the Americas remains a key strength for the Group – helping us deliver the most predictable results among our peers, as well as growing earnings,” Santander Executive Chairman Ana Botin said in a statement.
“During the quarter,” Botin added, “we have seen particularly strong growth in Brazil, Spain, Mexico, and the U.S., and this has more than offset a more challenging environment in other markets.”
Santander said it remains on track to meet its capital target and grow earnings per share by double digits in 2018. The bank’s underlying return on tangible equity, or ROTE – a key measure of financial strength for investors – stands at 12.2 percent.
Santander’s common equity tier 1 ratio, or CET1 – a capital measure introduced in 2014 as an economic safeguard – was 10.8 percent in June, significantly above the 4.5 percent minimum ratio banks are expected to maintain.
The world’s 18th-largest bank in total assets, Santander’s three largest markets are Brazil, Spain, and Great Britain.
Worldwide, Santander reported the number of customers using the bank’s digital services rose to 28.3 million, up 23 percent from last year. The bank said nearly half of its active customers are now regularly using digital services.
Santander said it gained three million customers in the last year, while focusing on the development and application of new technology – including the launch of the first blockchain-based international payments service for retail customers.
“During the second quarter we have delivered strong growth in underlying revenue and improving credit quality, despite strong currency headwinds,” Botin said.
“Our results show that the commercial and digital transformation is accelerating and continues to deliver improvements in customer engagement and earnings quality,” she said.
Scott Blake is a PBN staff writer. Email him at Blake@pbn.com.
